When operating margins hit 90th percentile at 44.95% and insiders sell for 11 straight quarters, the cycle pendulum has swung too far.

This framework suggests Broadcom represents a classic late-cycle phenomenon where extraordinary success has pushed every metric to historical extremes, creating asymmetric downside risk.

Is the price above or below what the business is worth?

Applying this lens reveals price significantly exceeds intrinsic value. The market pays 9x treasury yields for earnings that must decelerate dramatically to justify even current valuation. Classic overvaluation territory.

Where are we in the cycle?

This framework sees a business operating at peak cycle with nearly every metric at historical extremes. When multiple indicators flash red simultaneously, reversion becomes not just possible but probable.

Where might consensus be wrong?

Second-level thinking reveals the consensus mistake: everyone agrees this is exceptional execution, but insiders' systematic selling suggests they know something the 52 bulls don't. The perfect beat record has become expected, removing positive surprise potential.

Does upside significantly exceed downside?

This lens reveals terrible asymmetry — multiple valuation ceilings above while fundamental floors below. With metrics at extremes and growth deceleration already expected, the risk/reward skews heavily negative.

Applying the Marks framework reveals Broadcom as a late-cycle story where success has become the enemy of future returns. Every profitability metric sits at historical extremes while valuation multiples imply perfection must continue. The framework sees asymmetric downside when cycles turn, consensus breaks, and extremes revert. When insiders sell $1.25 billion during the best of times, should outsiders be buying?

This analysis applies Howard Marks's published investment framework to publicly available financial data. It is not authored by, endorsed by, or affiliated with Howard Marks. Educational purposes only. Not financial advice.